Why Net Domestic Product Should Replace Gross Domestic Product as a Measure of Economic Growth
In the third article, Roland Spant, a Swedish trade union economist, argues that Net Domestic Product (NDP) should replace GDP as a measure of economic growth for a number of purposes. The key difference between GDP and NDP is depreciation. With the shift in investment toward information technology assets with relatively short service lives, the share of depreciation in GDP has increased in most OECD countries and GDP growth now exceeds NDP growth. Spant points out that this means that the use of GDP leads to the overestimation of real output growth as well as the potential for noninflationary real wage gains.
Volume (Year): 7 (2003)
Issue (Month): (Fall)
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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hulten, Charles R, 1992. " Accounting for the Wealth of Nations: The Net versus Gross Output Controversy and Its Ramifications," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(0), pages S9-24, Supplemen.
- Ralph Kozlow, 2000. "International Accounts Data Needs: Plans, Progress, and Priorities," BEA Papers 0009, Bureau of Economic Analysis.
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